Russia wants to wrest control of the CPC pipeline

Dec 15, 2003 01:00 AM

The Caspian Pipeline Consortium (CPC), hailed as a breakthrough in international cooperation when it was launched two years ago, is fast becoming a battleground between Russia and the oil companies that use it to export their crude from landlocked Kazakhstan to world markets.
Russia, the biggest CPC shareholder, wants to wrest control of the pipeline from other shareholders, led by ChevronTexaco, and increase tariffs by 45 %. Foreign consortium members fear that higher fees would make the 560,000 bpd pipeline unattractive for exporters.

Tariffs along the 1,580 km pipeline to a terminal on the Russian Black Sea coast are currently set by CPC shareholders at $ 3.57 a barrel. Moscow, which says it has failed to earn anything from the project, wants to raise them to about $ 5.18 a barrel.
Moscow wants to designate the stretch of pipeline crossing Russian territory as a "natural monopoly," which would make it subject to tariff regulation by Russia's Federal Energy Commission (FEK).

In response to concerns expressed by the Americans, and CPC management arguments that such a change would violate earlier agreements, Moscow is proposing to set up an international commission to study the legal grounds for Russia's demand.
The proposal was passed to Leonard Coburn, a US Department of Energy regional head, who was part of an American delegation to Moscow, according to FEK head Georgy Kutovoy.

Source: Neftegaz.RU
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